(You can now subscribe to our(You can now subscribe to our ETMarkets WhatsApp channelLeading private lender YES Bank reported 15% year-on-year growth in loans and advances for the first quarter ended June 2024.
However, most of them had sell calls as the valuations remained unattractiveDomestic brokerage firm ICICI securities has a sell rating on the private bank with a target price of Rs 20.“The bank is making concerted efforts in organic PSL origination, which should ease incremental RIDF burden, aiding yield and RoA trajectory.
We estimate sharp improvement in RoA to 1.0% by FY26 vs FY24 RoA of 0.3%, led by improving NIM trajectory and benign credit costs.
Valuation, however, remains unattractive with the stock trading at 1.9/1.8/1.6x FY24/25E/26E ABV,” said Jai Prakash Mundhra, analyst at ICICI Securities.In terms of asset quality, the lender has been steadily improving its gross non performing assets (NPAs) as the same stood at 1.7% in Q4FY24.
Net NPAs were also down in the preceding quarter to 0.6% from 0.9% in Q3FY24 and 0.8% in Q4FY23.
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Leading private lender YES Bank reported 15% year-on-year growth in loans and advances for the first quarter ended June 2024. The company's loans stood at Rs 2.29 lakh crore in the reporting quarter, compared with Rs 2 lakh crore in the same quarter of last year.Deposits, on the other hand, increased 21% year-on-year to Rs 2.64 lakh crore in the June quarter as against Rs 2.19 lakh crore a year earlier.The bank's credit-to-deposit ratio for the first quarter stood at 86.4%, lower than 91.3% in the same quarter last year.Meanwhile, the liquidity coverage ratio improved to 137.8% in the April-June 2024 period.YES Bank posted a 123% year-on-year surge in its March quarter profit to Rs 452 crore, while net interest margins or NIMs were steady at 2.4%.Its balance sheet crossed the Rs 4 lakh crore mark during the fourth quarter of previous fiscal, aided by sustained growth momentum in SME and mid corporate advances and resumption of growth in the corporate segment.Post the fourth quarter results, analysts felt the business was steadily recovering, and one-offs are likely to continue. However, most of them had sell calls as the valuations remained unattractiveDomestic brokerage firm ICICI securities has a sell rating on the private bank with a target price of Rs 20.“The bank is making concerted efforts in organic PSL origination, which should ease incremental RIDF burden, aiding yield and RoA trajectory. We estimate sharp improvement in RoA to 1.0% by FY26 vs FY24 RoA of 0.3%, led by improving NIM trajectory and benign credit costs. Valuation, however, remains unattractive with the stock trading at 1.9/1.8/1.6x FY24/25E/26E ABV,” said Jai Prakash Mundhra, analyst at ICICI Securities.In terms of asset quality, the lender has been steadily improving its gross non performing assets (NPAs) as the same stood at 1.7% in Q4FY24. Net NPAs were also down in the preceding quarter to 0.6% from 0.9% in Q3FY24 and 0.8% in Q4FY23.
